The “Dirty Dozen” Tax Scams Of 2014

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(CBS MoneyWatch) The IRS has a warning for Americans — watch out for tax scams.

Every year the agency releases a “Dirty Dozen” list of the worst tax scams out there. This year, identity theft and phone scams top the list.

IRS Commissioner John Koskinen says even the savviest taxpayers can fall victim if they aren’t careful.

“These schemes jump every year at tax time,” he said. “Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues.”

Here’s this year’s “Dirty Dozen”:

1. Identity theft

Taxpayers who have their identities stolen can find that someone has already submitted a tax return in their name, received a refund and cashed the check.

The best way to guard against this is to keep a close watch on all personal information, particularly Social Security numbers.

Taxpayers who think they might be at risk because, for example, they may have recently lost personal information or had it stolen, should contact the IRS in advance to have special security measures applied to the their tax account. If taxpayers find they’ve already been victimized by someone filing a false claim, the IRS has a special office for that called the IRS Identity Protection Specialized Unit.

2. Phone scams

IRS phone scams are on the rise, and they can take on a variety of forms.

Some fraudsters call pretending to be with the IRS, telling the taxpayer he/she owes money. They can threaten the taxpayer with arrest, loss of a driver’s license or in some cases deportation.

In many cases this is followed up with a call from someone claiming to be with the local police department or DMV.

Others scammers call fishing for personal information like Social Security numbers by telling the taxpayer she’s owed a big refund — she just needs to verify certain personal details.

The IRS says if you get one of these phone calls, turn around and call the IRS at 800-829-1040. And if you know for certain that you don’t owe money, call to report the incident at 800-366-4484.

3. Phishing

These scams typically occur via email. The scammer is looking for personal information in order to steal the taxpayer’s identity.

Remember, the IRS never initiates contact with a taxpayer via email to request personal or financial information. If you receive an email claiming to be from the IRS, report it to phishing@IRS.gov.

4. Promises of “free money” from inflated refunds

In this scenario, scammers pose as tax preparers, promising the taxpayer a larger-than-expected refund. These fraudsters sometimes go so far as to set up legitimate storefronts during tax season.

They may inflate the taxpayer’s refund with bogus tax credits, charging for their services and then leaving the taxpayer to deal with the repercussions. Or worse, they may file a claim in the taxpayer’s name and cash the check, without the taxpayer ever knowing.

The IRS says a good rule to follow is to remember that legitimate tax preparers always give the taxpayer a copy of their return, while scammers often don’t.

Another thing to keep in mind: taxpayers are legally responsible for what’s on their tax forms. Take care when picking a tax preparer.

5. Preparer fraud

Similar to the above, not all tax preparers are on the up-and-up. Some legitimate tax preparers can scam their clients by stealing their identities (using the tax information they provided) or by stealing their refunds.